Excerpt:act (xvi of 1908), sections 17, 49 - mortgage--agreement by mortgagee to remit mortgage amount--registration, whether-necessary--contract act (ix of 1872), section 71,--penalty--interest, higher rate of, payable on default. - .....the mortgagors was exonerated by the plaintiff on payment of a sum of rs. 900 and a portion of the mortgage-money was remitted. both the district munsif and the subordinate judge have disbelieved the oral evidence as to this agreement and it is sought to be proved by ex. ii. this purports to be a receipt executed by the plaintiff to defendants nos. 1 and 2 and it goes further and says that the money is received towards the entire discharge of the debt due by the second defendant and he undertakes to execute a deed of relinquishment of right at his cost. if this does evidence the agreement that there should be a remission in the amount of the mortgage-money, it is clearly inadmissible in evidence as it would require registration being a document which affects a right in immoveable.....

Judgment:

Phillips, J.

1. The first defendant is the appellant and he is one of two mortgagors. He does not dispute the execution of the mortgage-deed and his liability to some extent, but he pleads an agreement with the plaintiff under which the second defendant one of the mortgagors was exonerated by the plaintiff on payment of a sum of Rs. 900 and a portion of the mortgage-money was remitted. Both the District Munsif and the Subordinate Judge have disbelieved the oral evidence as to this agreement and it is sought to be proved by Ex. II. This purports to be a receipt executed by the plaintiff to defendants Nos. 1 and 2 and it goes further and says that the money is received towards the entire discharge of the debt due by the second defendant and he undertakes to execute a deed of relinquishment of right at his cost. If this does evidence the agreement that there should be a remission in the amount of the mortgage-money, it is clearly inadmissible in evidence as it would require registration being a document which affects a right in immoveable property of the value of over Rs. 100. The contention that it can be used to prove this agreement because it also purports to be a discharge cannot be accepted. Either it is not evidence of the agreement in which case it will be admissible as a receipt or if it is evidence of the agreement, it requires registration. The two cases relied on by the appellant Karampalli Unni Kurup v. Tkekku Vittil Mutharakutti 26 M.k 195 and Goseti Subba Rao v. Varigonda Narasimham 27 Ml. 368 relate only to the proof of oral agreements and do not discuss the question of the admissibility of documents which are said to prove such agreements. As regards the admissibility of unregistered documents, I may refer to Chundooru Lakshmana Setty v. Duggisetty Chenchuramayya 44 Ind. Cas. 132 : (1918) M.W.N. 262. The Subordinate Judge having found that he cannot believe the oral evidence it must be held that there was no such agreement and this plea must be disallowed.

2. A further point is raised that the interest provided for in the mortgage-deed is penal and should be relieved against. The conditions in this deed are somewhat umxsual for there is a provision for the payment of one instalment of principal together with the interest thereon every year, and in default, there is a provision for a certain rate of interest. No doubt the default rate is slightly higher than the rate provided for in the body of the document and compound interest is to be paid. Considering the unusual nature of the document, I agree with the Subordinate Judge that this provision cannot be held to be by way of penalty.